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Buy Deepak Nitrite Ltd; target of Rs 295: CD Equisearch

CD Equisearch is bullish on Deepak Nitrite Ltd has recommended buy rating on the stock with a target price of Rs 295 in its research report dated May 31, 2018.

September 18, 2018 / 05:08 PM IST
 
 
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CD Equisearch's research report on Deepak Nitrite Ltd

Sorted into basic chemicals, fine & speciality chemicals (FSC) and performance products, DNL’s product portfolio comprises organic, inorganic and fine chemicals - for use in detergents, colorants, paper, agro chemicals, rubber etc.Sluggish overall volume growth (5%) failed to scupper business growth for overall revenues surged by 19.4% in Q4 - markedly improved from 6.1% in Q1- and operating margin rose by some 30 bps. Striking increases in both interest (34.1%) and depreciation expenses (14.3%) scarcely put brakes on PBT - which rose by a stunning 46.5%.

Outlook

Yet backward integration of Roha unit would boost capacity utilization of most propitious fine & specialty chemicals business. Wherefore margins could scarcely remain subdued. We recommend buying the stock with revised target of Rs 295 (previous target: Rs 251) based on 20x FY20 earnings.

For all recommendations report, click here

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first published: Jun 11, 2018 05:09 pm

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